Washington: A senior European official warned on Tuesday that it is "urgent and essential" that Washington take action to rebuild transatlantic ties after the revelation that it spied on European leaders.

"Friends and partners do not spy on each other," said Viviane Reding, vice president of the European Commission and EU Justice Commissioner, in a Washington speech.

"For ambitious and complex negotiations to succeed there needs to be trust among the negotiating partners. It is urgent and essential that our US partners take clear action to rebuild trust."

News that the US National Security Agency had tapped the phone of German Chancellor Angela Merkel angered Washington`s allies and undermined high-level talks on a transatlantic free trade zone.

Reding told an audience at the Peterson Institute for International Economics that the revelations have "unfortunately shaken and damaged our relationship."

"The close relationship between Europe and the USA is of utmost value," she said, according to prepared remarks.

"And like any partnership, it must be based on respect and trust. Spying certainly does not lead to trust. That is why it is urgent and essential that our partners take clear action to rebuild trust."